What Makes Traders Successful Isn't Their Strategy
One thing that makes trading interesting is the number of strategies one can use. There are so many strategies out there that can make you successful. You can also create your own trading strategy and be successful in it.
There are many trading strategies categories. The first strategy is based on time. In this, there are long-term traders who trade for the long term, swing traders who trade for the medium term, and day traders who focus on intraday trading. There are also trading strategies that are based on the assets traded. There are traders who specialize on a singular item, while others specialize on a diversified portfolio. There are also some who focus on currencies alone while others focus on commodities and others equities. For day traders, there are those who use scalping while others use hedging among other strategies.
While it is very important to have a good strategy, it is important to understand that the strategy alone won’t make you successful. There are other things that contribute to the success of a trader.
First, discipline is a very important thing that will help you become a better trader. This is what has made many intelligent traders lose it. Being disciplined is a number of things in trading. For instance, it means understanding that not all your trades will be profitable. No one has an unblemished track record in trading. We have all seen sucessful trader fall from grace because of a single mistake. As a trader, it is very important for you to develop and maintain strong trading discipline. For instance, always close a trade when the target reached
Second, successful traders understand their strengths and weaknesses. We all have our strengths and weaknesses. The best thing for any trader is to identify areas where they are strong at and identify their weak points. The earlier they do this the better for them. Perhaps, you are an excellent gold trader. You should carefully identify the items you are good at trading and capitalize on them. You should also avoid areas where you are not very strong. Many people find it difficult to trade copper and other commodities like Zinc. If these are not your strength areas, avoid them and find another sector you are good at.
Third, people who are successful in trading understand that it’s the little things that matter. To many people, making consistent trades is a challenging thing. They can’t understand how people have done it. The fact is that it’s the small things that differentiate between successful traders and a failed ones. Some of these simple things are: taking time to journal your trades, reflecting on your wins and losses, writing down the reasons for buying or selling, and putting in the stop loss and the take profit. Ignoring these simple steps always seem easy. The price for not doing so in the long term is very expensive.
Finally, successful traders understand that risk management and their psychology are very important. No matter how good your strategy is without a good risk management strategy, chances are that you won’t make it. Risk management allows a trader to benefit when the trade goes his way while still looking at the downside. If the trading is not going his way, the trader should close it at a comfortable level.
Having a good trading strategy is a good thing. In fact, having no strategy is equal to travelling without knowing where you are going. However, it is important to note that a strategy is not the only thing that matters. Instead, having a holistic trading approach that encompasses all the major attributes is the key.